A bill to amend the Internal Revenue Code of 1986 to provide that certain uses of a facility owned by a tax-exempt organization shall not be treated as private business use for purposes of determining whether bonds issued to provide the facility are tax-exempt bonds.

Amends the Internal Revenue Code to provide that the use of a facility owned by a tax-exempt organization by a non-governmental person resulting from the purchase of a franchise or similar type asset by a tax-exempt organization shall not, if certain conditions are met, be treated as a private business use for purposes of determining whether bonds issued to provide the facility are tax-exempt bonds.

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1976 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1976

To amend the Internal Revenue Code of 1986 to provide that certain uses 
 of a facility owned by a tax-exempt organization shall not be treated 
   as private business use for purposes of determining whether bonds 
          issued to provide the facility are tax-exempt bonds.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 19, 1999

 Mr. Thompson introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide that certain uses 
 of a facility owned by a tax-exempt organization shall not be treated 
   as private business use for purposes of determining whether bonds 
          issued to provide the facility are tax-exempt bonds.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CERTAIN USES OF FACILITY OF TAX-EXEMPT ORGANIZATION NOT 
              TREATED AS PRIVATE BUSINESS USE.

    (a) In General.--Section 145 of the Internal Revenue Code of 1986 
(relating to qualified 501(c)(3) bonds) is amended by redesignating 
subsection (e) as subsection (f) and by inserting after subsection (d) 
the following new subsection:
    ``(e) Certain Use Not Treated as Private Business Use.--In the case 
of a facility owned by a 501(c)(3) organization, use of such facility 
by a nongovernmental person solely resulting from the purchase of a 
franchise or similar-type asset by such 501(c)(3) organization shall 
not be treated as a private business use if--
            ``(1) the nongovernmental person is not entitled to control 
        the economic operations of the facility,
            ``(2) the nongovernmental person does not have an interest 
        in revenues derived with respect to the facility,
            ``(3) such 501(c)(3) organization is not obligated by 
        contract or otherwise to compensate the nongovernmental person 
        with respect to activities or services performed by such 
        nongovernmental person at the facility, and
            ``(4) the nongovernmental person does not have any 
        leasehold interest in the facility.
Paragraphs (2) and (3) shall be applied by disregarding any annual 
payment (other than a payment representing a share of net profits) by 
the 501(c)(3) organization of less than 5 percent of the annual 
revenues generated by the facility if such payment is required pursuant 
to standard agreements relating to the purchase of such franchise or 
similar-type asset.''
    (b) Effective Date.--The amendment made by this section shall apply 
to uses after the date of the enactment of this Act.
                                 <all>